Sabotage claim dogs Exxon Mobil

Saturday

Aug 29, 2009 at 2:00 AM

DALLAS — A pair of elected officials in Texas is going after Exxon Mobil, a name synonymous with the state, for allegedly stuffing abandoned oil wells with piles of junk, sludge and tools so other companies could not drill in the same places.

THE ASSOCIATED PRESS

DALLAS — A pair of elected officials in Texas is going after Exxon Mobil, a name synonymous with the state, for allegedly stuffing abandoned oil wells with piles of junk, sludge and tools so other companies could not drill in the same places.

The Texas Supreme Court recently reversed a jury's finding that the world's largest publicly traded oil company intentionally wrecked the wells nearly 20 years ago.

The state land commissioner and comptroller, however, don't want Texas to drop the case.

"They sabotaged the wells," said Land Commissioner Jerry Patterson, who began a campaign against Exxon in July by asking state regulators to levy massive fines. "If they're allowed to get away with that, that puts the world on notice: They can do what they want. It's bad public policy."

State Comptroller Susan Combs filed a brief asking the Supreme Court to rehear the case.

Texas is a huge beneficiary of Exxon's success in the oil patch. The company says it paid nearly $900 million in taxes and royalties to the state in 2008 and has more than 38,000 employees and retirees living in Texas.

But Combs says future revenue from other energy companies could be endangered if they fear wells are being damaged.

Irving-based Exxon Mobil said it followed standard procedures and denies any sabotage at sites outside of Corpus Christi.

The Texas Railroad Commission, which regulates the oil and gas industry, said it's reviewing Patterson's request.

According to state laws governing oil field procedures, Patterson said, fines against Exxon could reach into the millions of dollars.

The case stems from a dispute between Exxon and landowners over royalties paid for decreasingly productive wells, according to court documents. Negotiations broke down in 1989, and two years later Exxon had plugged the last of the wells.

Smaller drilling companies routinely follow major producers and reopen wells that have been plugged after signing new leases with the landowners.

Usually the metal casings near the surface are removed when a well is abandoned. Cement plugs are then inserted to close off the hole.

But when workers with the much smaller company Emerald Oil & Gas tried to re-enter sites in 1994, they found numerous obstructions, including a tool known used to break up well casings that was still loaded with explosives, upside-down drill bits, steel debris and the gooey remnants of oil tank bottoms, according to lawyers and court records.